Haters gonna hate. But hating Russia as investment story this year might prove as unproductive as it did in 2016, when the Russian small to mid-cap index rose over 95%. And now that Russia has become the world’s leading producer of hydrocarbons, surpassing Saudi Arabia, and the new administration of Donald Trump has signaled and end to anti-Russian belligerence, investors are piling in.
By country, Russia reported the most inflows of foreign portfolio money than any other global emerging market fund. More than China. More than India, Brazil and Mexico. Global emerging market funds saw a second straight week of inflows last week, hitting $476 million, according to EPFR Global.
So far there has been net inflow of $472 million into Russian stocks, compared with $837 million all last year.
Russia is now the most popular emerging market in terms of foreign investor inflows as a percentage ofmarket cap. Last year, investor flows were the equivalent of 1.6% of Russia’s stock market capitalization, after three straight years of declines. The only other country that greater inflows as a percentage of market cap was Colombia. Investors were betting on a peace deal with the Revolutary Armed Forces of Colombia at the time…